Deposit meaning
In a property purchase, deposit can mean two things. Your mortgage deposit is the share of the price you fund yourself rather than borrow. The contract deposit, commonly up to 10 per cent, is paid to the seller's solicitor at exchange of contracts and forms part of your total purchase funds.
Deposit is one of the terms you are likely to meet when buying or selling a home in England. Here is what it means in plain English, and where it fits into your move.
Proving where the money came from
Conveyancers and lenders must check the source of your funds. Bank statements, evidence of savings and a gift letter for family contributions are commonly required, so gather them early.
Key takeaway
In a property purchase, deposit can mean two things. Your mortgage deposit is the share of the price you fund yourself rather than borrow. The contract deposit, commonly up to 10 per cent, is paid to the seller's solicitor at exchange of contracts and forms part of your total purchase funds.
Frequently asked questions
Do I lose my deposit if I pull out?
Before exchange there is no contract deposit to lose. After exchange, withdrawing normally means losing the deposit paid at exchange and possibly further liability.
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